KeyArena remodel will support NBA/NHL

There has been some concerns raised about KeyArena becoming a music only venue that would essentially lock out the Sonics and the NHL. The concern appeared to originate from a Wall Street Journal article that was quoted and magnified by a local article.
The Oak View Group’s Lance Lopes addressed some concerns raised by the WSJ article:
“Our long term vision includes music, professional sports, and special events,” Lance Lopes, director of special projects for the Oak View Group, who is leading local efforts on the bid, said Friday in response to the article. “The new arena at Seattle Center will accommodate and seek out a wide variety of entertainment rich experiences. Music though is the programming we can count on when we open the doors to the new arena at Seattle Center.”
There still seems to be a little fear by a small percent of fans that worry this could be a ruse to be a music only venue, but I figured I would address it.

The RFP

First of all, the KeyArena RFP calls out NBA and NHL in the first sentence of the City-of-Seattle-Logointroduction and called out on the first objective of the list of City’s Arena Objectives. so clearly the city is making that a priority when seeking proposals.  The RFP also calls for “Confirmation that the proposed conceptual design(s) are intended to comply with NBA and NHL requirements for potential future tenancy.” It seems counterproductive to think that Seattle Partners and OVG would go to great lengths (and cost) to be NBA and NHL compliant, with the intent to never housing teams from those leagues.

Expectations from the leagues

As much as we would love to have the leagues come out and say “If you build it, we will come”, we all know that will never happen. In fact, both leagues are probably tired of answering questions about Seattle. It’s noise that takes away from their product. They want fans and journalists talking about the Stanley Cup Playoffs and NBA playoffs; not franchises that don’t exist and might never exist, if we don’t get an arena. It is crystal clear that the leagues will expand when they are ready and without a built (or half-built) arena we don’t stand a chance of getting a team. Although we have not seen anything directly, we have heard that the bidders (Seattle Partners & OVG) have been in regular contact with both leagues to make sure they are meeting the league requirements in the RFP. It might be wishful thinking, but my hope is that both bidders have validation of compliance with league requirements with a letter from both the NBA and NHL.

The top grossing concert venues.

According to this article from Billboard Magazine in 2015 of the list of the world’s 10 Top-Grossing Concert Venues, 4 of the 6 North American properties on the list have both NBA and NHL franchise.
Top grossing venues
I am not an expert in Arena economics but I think it is fair to say that having only a few tenants (NHL, Sonics & Storm) that book half the calendar is a good thing and the list of top grossing concert venues supports that claim.
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2 proposals for KeyArena RFP process

As you have probably seen by now, two groups have submitted their responses to the City of Seattle’s Request for Proposal (RFP) to renovate KeyArena into a world-class entertainment facility that could someday accommodate the return of the Sonics and the arrival of an NHL franchise. Seattle Partners (AEG & Hudson Pacific) and Oak View Group delivered some stunning proposals; exceeding most people’s expectations on what could be done with the KeyArena site. It would be premature to do so, but neither group announced any potential NBA and NHL ownership groups. I am sure neither league would appreciate implying expansion while both leagues have said (at least publicly) that they are not expanding.

Oak View Group

The Oak View Group is spearheaded by none other than Tim Leiweke who has a long and healthy resume working for NBA and NHL clubs. Most notably he was the CEO and President of Maple Leafs Sports & Entertainment, the parent organization of the Toronto Raptors and Maple Leaf Sports.

Their proposal:

  • Cost of Project: $564M
  • Square Footage: 660,000
  • NBA Capacity: 18,350
  • NHL Capacity: 17,100
  • Public Financing: None

Seattle Partners

AEG & Hudson Pacific have come together to submit a bid as Seattle Partners. If you recall, AEG is majority owner of the Los Angeles Kings and minority interest owner in the Los Angeles Lakers. Victor Coleman, CEO of Hudson Pacific, has been clear on his intent to bring an NHL team to Seattle.
Their proposal:
  • Cost of Project: $520M
  • Square Footage: 600,000
  • NBA Capacity: 18,113
  • NHL Capacity: 17,120
  • Public Financing: $250M in public bonding (They have recently backed off on this “suggestion,” so it is unclear the current state of this piece of the response)

Summaries

I cannot summarize the proposals any better than executive summaries themselves and a lot of the details have not been revealed, so here are some links to the proposals and the better articles I’ve read on those proposals.

What is next?

Brian Surratt, Director of Office of Economic Development laid out the evaluation criteria to the Seattle City Council and the timeline with the following slides:
KeyArena RFP Eval Criteria 2017-04-17

KeyArena RFP Overview 2017-04-17

My Take

Both proposals look promising and would appear to be able to bring the NHL to Seattle and bring the Sonics back as well. People still seemed concerned about traffic and parking but it is a very subjective piece to measure. Especially when you consider the traffic patterns will be shifting once the 99 tunnel is completed and the 2 additional streets open up. Additionally, the density is changing while car ownership decreases in more urban areas.  How the Mayor & City Council weigh all the pros and cons of KeyArena is anyone’s guess. I appreciate the evaluation criteria but it seems very unclear on how it all comes together. The hope is that one of these options will be recommended to the City Council. One thing is for sure, it is going to be a busy 3 months.